Regulatory Bulletin: July 2017

[Note: Various links are noted in this Bulletin. If you cannot access by Control/Click you make copy and paste in your browser.]

Is Your Bank Required to File HMDA Data? If So, Do You Know How to Find Resources to Help You?

As updated in July, 2017, modifications have been made to the Technology Preview, Filing Instructions Guide for data collected in 2017, Filing Instructions Guide for data collected in or after 2018, and Frequently Asked Questions (FAQs). The FFIEC and HUD have published the following resources for financial institutions required to file Home Mortgage Disclosure Act (HMDA) data:

• Technology Preview
This section provides resources for financial institutions preparing their systems to file HMDA data with the CFPB. See https://www.consumerfinance.gov/data-research/hmda/tech-preview For HMDA data collected in or after 2017, a web-based data submission and edit-check system (the HMDA Platform) is being created to process HMDA data. It is expected that the HMDA Platform will streamline the HMDA submission process and reduce burden on HMDA filers. This webpage is intended to provide an initial view into the way HMDA filers will interact with the HMDA Platform. Additionally, this webpage describes resources that will be available for filers, developers, and the interested public. This webpage will be updated on an ongoing basis, to keep stakeholders informed of new developments.

Filers will not need to use the LAR Formatting Tool if they are able to format their HMDA data into a pipe delimited text file by using, for example, vendor HMDA software, the financial institution’s current Loan Origination Software (LOS), or applications such as Microsoft® Access® or Excel® that may be used for data entry and formatting.

The guidance addresses supervisory expectations for model risk management, including: model development, implementation, and use; model validation; and governance, policies, and controls. The FDIC is adopting this guidance to facilitate consistent model risk-management expectations across the banking agencies and industry. The FDIC noted that it is not expected that this guidance will pertain to FDIC-supervised institutions with under $1 billion in total assets unless the institution’s model use is significant, complex, or poses elevated risk to the institution.

For details of the Supervisory Guidance, see https://www.fdic.gov/news/news/financial/2017/fil17022a.pdf
Compliance with the guidance provided in this and the earlier FRB and OCC guidance is an important part of management oversight. Of particular significance is that the regulators refer to this guidance for expectation of periodic BSA monitoring system model valuation. Emphasis has also been placed on evaluations of OFAC screening processes as part of risk management.

If you need any assistance with model risk management please contact FRC.

What Should You Know About Pre-Dispute Arbitration Agreements for Providers of Certain Consumer Financial Products?

On July 10, 2017, the Consumer Financial Protection Bureau (CFPB) issued a final rule governing the use of pre-dispute arbitration agreements by providers of certain consumer financial products and services.

Pursuant to section 1028(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203), the CFPB issued this final rule establishing 12 CFR part 1040 to regulate arbitration agreements in contracts for specified consumer financial product and services. First, the final rule prohibits covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service. Second, the final rule requires covered providers that are involved in arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the CFPB and also to submit specified court records. The CFPB is also adopting official interpretations to the proposed regulation.

To support implementation of the new rule, the CFPB launched a web page to help access materials to help those affected comply. Reference sections are:

Did You Know The CFPB Issued a Final Rule Amending and Clarifying Mortgage Disclosure Provisions in Regulation Z?

The CFBP issued a final rule (2017 TILA-RESPA Rule) July 7, 2017 amending and clarifying certain federal mortgage disclosure provisions implemented in The Truth In Lending Act (Regulation Z). To support implementation of the 2017 TILA-RESPA Rule, the CFBP issued an Executive Summary.

This rule memorializes the Bureau’s informal guidance on various issues and makes additional clarifications and technical amendments. This rule also creates tolerances for the total of payments, adjusts a partial exemption mainly affecting housing finance agencies and nonprofits, extends coverage of the TILA-RESPA integrated disclosure (integrated disclosure) requirements to all cooperative units, and provides guidance on sharing the integrated disclosures with various parties involved in the mortgage origination process.

This entry was posted
on Monday, July 17th, 2017 at 9:27 am and is filed under Regulatory Bulletins, Regulatory Insights.
You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.